On the eve of our 2012 national elections, I am getting somewhat political from an economic perspective.
I found thishttp://www.sherrodbrown.com/petition/overturn-citizens-united-a2/ link to sign a petition for a constitutional ammendment. We need to make it clear to the Supreme Court that as human citizens, we do not want corporations to own Wahington DC and our elected officials!
This is not a partisan topic. This applies to all areas of our national, state and local governments. People vote and people should be the supporters of candidates for office, not corporations! What a slew of normative statements, Ms C.
'I just had to post this opinion since every time I teach economics, I state that we have the best government money can buy.
Wednesday, August 29, 2012
Thursday, August 16, 2012
Companies PAy more to their CEO than to Uncle Sam
While surfing the financial news on the web, I came across and articlehttp://money.msn.com/business-news/article.aspx?feed=AP&date=20120816&id=15456154 about a study ( note: by a liberal think tank) that shows several large corporations pay more to their CEOs than they pay in taxes to the US government.
Formerly I would have agreed that this is a decision best left in the hands of the corporate directors. That was when I was an idealist who bought into the power of the market. Now I am more critical of the decisions made by directors. The fact that these corporations are so large means they have market power and there are probably barriers to entry, hence a low level of competition. The market does not protect the consumers.
These companies seem to be run by an "Old Boys" (and now some girls) Network. You sit on my board and rubber stamp what is my best interest and I'll sit on your board and rubber stamp what you want. If neither the market nor the directors put a lid on executive compensation, there seems to be no limiting system. Employees (downsized and outsourced; productivity is soaring) and consumers are paying the tab.
On top of this, the government is getting less tax revenue than the CEO's pay for supplying a system of laws, courts and infra structure that benefit the corporation. I don't think we can expect any new tax law that might mitigate this situation. There are too many lobbyists to allow that to happen soon. This is brought to light at a time when the US government needs more revenue to offset spending on two wars and a deep recession.
What is the answer? Americans do not want their government taking over corporations. We believe in the independence of the free market. The problem is that smart people are finding ways to avoid the penalties of the market (too big to fail being a recent issue) and this is costing the rest of us a bundle.
Some maintain that we have enough or too many laws /restrictions on business. I would say that if we do, they are not being enforced or they are not effective.
What do you think?
Formerly I would have agreed that this is a decision best left in the hands of the corporate directors. That was when I was an idealist who bought into the power of the market. Now I am more critical of the decisions made by directors. The fact that these corporations are so large means they have market power and there are probably barriers to entry, hence a low level of competition. The market does not protect the consumers.
These companies seem to be run by an "Old Boys" (and now some girls) Network. You sit on my board and rubber stamp what is my best interest and I'll sit on your board and rubber stamp what you want. If neither the market nor the directors put a lid on executive compensation, there seems to be no limiting system. Employees (downsized and outsourced; productivity is soaring) and consumers are paying the tab.
On top of this, the government is getting less tax revenue than the CEO's pay for supplying a system of laws, courts and infra structure that benefit the corporation. I don't think we can expect any new tax law that might mitigate this situation. There are too many lobbyists to allow that to happen soon. This is brought to light at a time when the US government needs more revenue to offset spending on two wars and a deep recession.
What is the answer? Americans do not want their government taking over corporations. We believe in the independence of the free market. The problem is that smart people are finding ways to avoid the penalties of the market (too big to fail being a recent issue) and this is costing the rest of us a bundle.
Some maintain that we have enough or too many laws /restrictions on business. I would say that if we do, they are not being enforced or they are not effective.
What do you think?
Wednesday, August 8, 2012
Taxing Olympians
I will admit that I am no sports enthusiast! However the uproar over the US "taxing" Olympic medals sounded very suspicious to me. First of all I highly doubted that the actual medals were being taxed ( I don't think they contain that much precious metal). It seems I was correct; please see the Slate article I read on this issue this morning.
What really got me was what a ridiculous political football this has become. Both sides of the political campaign have jumped on a non issue (or is it) to benefit from public sentiment that is running high due to fixation on the entertaining olympic sporting events. As I had assumed, the tax in question is on the additional prize income generated for the Olympian when a medal is won. The tax is not a tax on the object, the Olympic medal. It is not a special tax, but merely the result of earned income. This is not different from taxing a bonus one receives for meeting a sales or performance objective. What a slippery slope to start exempting these earnings from our tax base.
The saddest part of this debate is that I have heard comments form more than one source to the effect that the person speaking is outraged that the US taxes Olympic medals! It really took hold in the American mindset that the Olympians were being penalized for winning! That left cagey politicans from both major parties no choice but to demand an exemption. What is wrong with this picture????
Subscribe to:
Posts (Atom)
